DeVry BUSN379 Week 1 homework es sample

1. This is a sample of the
Week 1 Homework ES Quiz
DeVry BUSN379
I had an A average and barely passed this course!!!
If you study these questions you’ll be learn the material and be much better
prepared than I was.
1. Question :
(TCO 1) Which of the following statements is not true
regarding the goal of financial management?
The goal of maximizing the value per share of existing
stock is relevant to all organizations.
A way of aligning management goals to shareholder’s
interest is to tie managerial compensation to the market value
of the firm’s stock.
For a company considering international operations, the
goal will be the same but the company will have to consider
the local social, economical and political environment in the
decision-making process.
All of the above are true.
2. Question :
(TCO 1) Market values reflect which of the following:
The amount someone is willing to pay today for an asset.
The value of the asset based on generally-accepted
accounting principles.
The asset’s historical cost.
A and B only
3. Question :
For this question, use the information for Sports Baseballs,
Inc. Sports Baseballs, Inc. is a corporation that manufacturers
and sells baseballs across several states in the Southeast. It
had sales of $2.7 million during the last year. Expenses were
as follows:
Cost of goods sold............................... $1.2 million

2. Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000
(TCO 1) Suppose that Sports Baseball has 20,000 shares of
stock. What is the dividends per share figure?
5.0
8.75
7.50
5.50
Chapter 2, page 28, Net Income/Total Shares Outstanding= $150,000 /20,000=$7.5
4. Question :
For this question, use the information for Sports Baseballs,
Inc. Sports Baseballs, Inc. is a corporation that manufacturers
and sells baseballs across several states in the Southeast. It
had sales of $2.7 million during the last year. Expenses were
as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000
(TCO 1) Assuming a tax rate of 30%, the percentage of
dividends per net income is approximately ______ and
operating cash flow is _________ than net income.
Hint: You need to calculate the net income and divide
dividends by the net income.
30% and lower
60% and lower
30% and higher
60% and higher
Answer: Dividends / net income = $150,000/$262,500 = 57.14%
Net Income = Taxable Income – Taxes = $375,000 - $112,500 = $262,500

3. Operating Cash Flow = EBIT + Depreciation – Taxes
EBIT = $2,700,000 – ($1,200,000+250,000+175,000+500,000) = $575,000
Taxable Income = EBIT – Interest = $575,000 - $200,000 = $375,000
Taxes = $375,000 x 30% = $112,500
Operating Cash Flow = $575,000 + $500,000 - $112,500 = $962,500
5. Question :
For this question, use the information for Sports Baseballs,
Inc. Sports Baseballs, Inc. is a corporation that manufacturers
and sells baseballs across several states in the Southeast. It
had sales of $2.7 million during the last year. Expenses were
as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000
(TCO 1) Select all items that will be included in Sports
Baseballs, Inc. Balance Sheet. For this exercise you will be
choosing more than one option for your answer:
Cash on hand
Fixed assets
Net sales
Administrative expenses
Taxes
Long-term debt
Dividends paid
Marketing expenses
Consulting revenues
6. Question :
(TCO 1) Which one of the following activities best exemplify
working capital management. For this exercise you will be
choosing more than one option for your answer:

4. Identify three good investment opportunities for the firm.
Obtain a short-term loan to purchase materials.
Assess the level of inventory to be kept on hand.
Sale long-term bonds to raise funds for a new machine.
Determine the return of a potential project.
Calculate the cash flows for a project.
Manage payments to suppliers.
7. Question :
(TCO 1) Match the following terms with the examples as appropriate:
3
: Insider
trading
» 3 : Martha Stewart's sale of ImClone stock as result of
information provided by the company's CEO before an
announcement was made public that significantly
decrease ImClone's stock price.
1
: Social
responsibility
» 1 :McDonald's work to redesign packaging items with
recyclable materials.
5
: Sarbanes-
Oxley Act
» 5 :established an oversight board responsible for
improving auditing standards within companies.
4
: Fraud
» 4 :Parmalat's deliberate fraudulent accounting practices.
2
: Antitrust
case
» 2 :Microsoft's monopolistic behavior.
(Chapter 1, pages 12-15 and Lecture)
8. Question :
(TCO 1) Can you provide some examples of situations in which
business ethics play a role in the financial management
process?
(p.10-12)
- environmental clean-up
- employee safety programs
- outsourcing and offshoring
- move operations to foreign countries for tax advantages
- downsizing / cut jobs to increase shareholder value